The NIRVIK Scheme (Niryat Rin Vikas Yojana) is a government initiative designed to ease access to credit for exporters and boost India's export sector, especially focusing on small-scale exporters. It is implemented under the Export Credit Guarantee Corporation of India (ECGC) and was announced by the Finance Minister during the Union Budget 2020-2021 on February 1st, 2020.
Key Objectives of the NIRVIK Scheme:
- Enhance credit availability: The scheme seeks to increase credit access for exporters by providing better coverage.
- Support small-scale exporters: It aims to reduce the cost of credit, particularly for MSMEs (Micro, Small, and Medium Enterprises), thus making Indian exports more competitive globally.
Features of the NIRVIK Scheme:
- High Insurance Coverage:
- Up to 90% insurance on the principal amount and interest, ensuring exporters are safeguarded against defaults and delays.
- Lower Interest Rates:
- For foreign export credit, interest rates will be limited to below 4%.
- For rupee export credit, the rates will not exceed 8%.
- Coverage for Pre and Post-Shipment:
- Both pre-shipment (before goods are dispatched) and post-shipment credit (after dispatch) are covered.
- Sector-specific Premiums:
- Gems, jewellery, and diamond exporters with a credit limit of over Rs 80 crore will have higher premium rates, reflecting the higher risk in this sector.
- For credit limits below Rs 80 crore, the premium rate is 0.60% per annum, while for limits above Rs 80 crore, the rate is 0.72% per annum.
- Simplified Claims Process:
- Quick settlement of claims and simplified procedures for exporters, including MSMEs, to boost efficiency.
- Export Credit Monitoring:
- Exporters with losses exceeding Rs 10 crore will undergo inspection by ECGC to ensure the credit system is functioning properly.
Benefits of the NIRVIK Scheme:
- Improved Credit Accessibility: Makes credit more accessible and affordable for exporters, especially for MSMEs.
- Competitiveness: Reduces the cost of exporting by lowering the cost of credit, making Indian goods more competitive in international markets.
- Simplified Procedures: The scheme eliminates bureaucratic hurdles, offering simplified export credit insurance processes.
- Enhanced Liquidity and Capital Relief: By offering extended insurance coverage, the scheme will lead to better liquidity and lower credit costs for exporters.
Impact on MSMEs:
The MSME sector will greatly benefit from the NIRVIK scheme as it eases the process of obtaining export credit and reduces the financial burden, encouraging ease of doing business and enhancing export opportunities for small businesses.
Export Credit Guarantee Corporation of India (ECGC):
Established in 1957, ECGC provides Credit Risk Insurance and other services to support India's export industry. It helps mitigate the risks associated with export credit and enhances the credit availability for exporters.
Conclusion:
The NIRVIK Scheme is expected to play a pivotal role in reviving India's export sector by enhancing credit accessibility, providing comprehensive insurance coverage, and streamlining the process for exporters. It will also contribute to the overall growth of MSMEs, making Indian exports more competitive on the global stage.
